>Congress Approves Bill Restricting Credit Card Industry

>Our government today approved credit card overhaul measures that would enact new restrictions on the industry as follows:

  1. Require that customers penalized by higher interest rates because they missed a payment be given a chance to reclaim their lower rate after six months.
  2. Protect debt-ridden consumers from many of the surprise charges common in the industry, like over-the-limit fees and a charge to pay the bill by phone.
  3. Require that cardholders receive 45-days’ notice before their rates are raised, which is to take effect in July 2010 under new regulations by the Federal Reserve.
  4. Restrict when and how banks charge people and who could get a credit card.
  5. Require people under 21 to prove first that they can repay the money or that a parent or guardian is willing to pay off their debt if they default.

While I’m thankful that efforts are being made to protect consumers, I’m puzzled by the way this legislation was scripted.

  1. Why wait six months to lower the interest rate for consumers who have been penalized by the higher rates for years?
  2. Why not prevent the credit card companies from sending applications to our home addresses in the name of our sons and daughters because they’ve turned 18 and are easy prey for financial predators?
  3. How is a 45-day notice before raising a consumer’s interest rate for whatever reason going to help anyone? If their debt is significant, what can they possibly do to prevent being penalized any more than they already have and will continue to be?
  4. Why wait until 2010 before any measure goes into effect?
  5. In what way can a 21-year old prove they can repay a debt that won’t qualify them for a credit card? What kind of “yes” from a parent or guardian to guarantee the credit card in case of default will prevent 21-year olds from getting credit cards?

I fail to see how any of this is going to prevent credit card companies from continuing to take advantage of the consumer. There are no real “teeth” here. There are no real changes being implemented that will influence the behaviors of the credit card companies, or for that matter, the behaviors of the consumer.

Until the next post,

God Bless & Safe Journeys!

Maxie

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